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We don't bother about Foodpanda, says Zomato's Deepinder Goyal

Zomato is diversifying beyond search and taking baby steps into the online food delivery market. Co-founder Deepinder Goyal, spoke to Business Today, on the future plans.

twitter-logoGoutam Das | May 5, 2015 | Updated 18:05 IST
Zomato Co-founder Deepinder Goyal
Zomato Co-founder Deepinder Goyal (Photo: Vikas Sharma)

Restaurant discovery company Zomato is diversifying beyond search and taking baby steps into the online food delivery market - thus far, the forte of its rival Foodpanda. Co-founder Deepinder Goyal, spoke to Business Today, on the future plans - 

BT: Zomato is changing. Do you want to talk about the new Zomato?

Goyal: The discovery area we call search is helping people find the right place to eat. That is our core business as of now. We are in 22 countries. Internally, we call this space the canvas. Succeeding in the search space is necessary to succeed in all adjacent areas. If we win here, it is easy for us to win everywhere else. In India, we get about 400,000 people visiting us every day. Globally, it is close to 2.8 million now. So what do you do after search? If you go to a restaurant, you book a table, you need to pay. There are lot of interaction points between the customer and the restaurant. But everything begins with search. That's the 400K audience we already have. So we are going to go into these adjacent areas. We have launched the cashless product (payments product for dining in) in Dubai. It is Uber-style payment. You check-in to a restaurant and tell the restaurant that you are going to pay through Zomato. You can have you meal and just leave. You don't have to carry your wallet with you. It is credit card on file and it will get auto-debited. We are also getting into the delivery business. We are starting off in India. (Zomato has already launched its delivery business. The interview was conducted before the launch). We want to dominate end-to-end of the food chain.

BT: How are you doing in terms of monetisation?

Goyal: In search, it is advertising. We have about 5,000 advertisers across the world. India would be 3,000. India is the biggest in terms of advertisers but not in terms of revenue. India is 40 per cent of the revenues. So rest of the world is bigger than India. Of the 22 countries we are in, 14 we launched ourselves. Dubai is doing very well in terms of revenue. India and Dubai are profitable for us. Philippines, South Africa, New Zealand and Indonesia are doing very well in revenue already and they will break even in the next three months. We were Rs 36 crore in March 2014. This year, we would be Rs 90 crore. Our ad sales is the core business model anyways. We will triple again next year.

BT: When you talk of adjacencies, how big do you think is the food delivery market?

Goyal: We never know going in. We know that out of the 400,000 people, almost 100,000 are searching for delivery options. If you are able to convert a large chunk of them to delivery online, that's a good business to be in. The 400,000 number is growing 10 per cent month on month. That's the kind of growth potential we are sitting on. The monetisation here would be based on transactions. We will charge a part of the bill. Foodpanda charges about 15 per cent on an average. We don't want to do that. That's way too much for restaurants. We will charge at 7.5-10 per cent. This is not our core business. So we can go cheaper. This gives us incremental revenues and more satisfied customers.

BT: Foodpanda is a formidable competitor...

Goyal: We don't bother about Foodpanda. They have very low volumes. I think they are doing about 10,000 orders a day. We have 100,000 searches for delivery a day.

BT: What is the entry barrier in the delivery space like?

Goyal: Very high. There is a chicken and egg part. What do you bring in first? Restaurants or customers? If you don't have restaurants you can't get enough users to sign up. If you don't have enough app users, you can't get enough restaurants to sign up. Foodpanda has been at it for three years now. They are barely doing a decent job. For us, the chicken and egg doesn't exist because we already have so many people using the app.

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